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According to testimony looked over this month, Ohio lawmakers have changed their minds about making a state cryptocurrency reserve. They now want to make it a bigger Strategic Reserve Fund that can hold traditional assets like bonds and exchange-traded funds.
Recent changes made by the House got rid of the word “cryptocurrency” from the fund’s name and expanded the bill to include more traditional assets such as exchange-traded funds (ETFs) and bonds. Analysts note that the move mirrors how private investors diversify across crypto options trading platforms and traditional markets to balance volatility with yield potential. All this serves to move some interest payments from the Budget Stabilization (rainy-day) fund, mortgage-insurance interest, and unclaimed funds to the new vehicle.
The main bill, which was presented as House Bill 18 in the 136th General Assembly, let the state treasurer to put up to 10% of some state accounts’ funds into digital assets. Bitcoin is the most popular choice in the early discussions.
Instead of focusing on a crypto-only reserve, committee updates now stress a wider, more varied mandate.
Lawmakers also adopted language that offers liability protections to officials in charge of the fund from being held personally responsible for market losses. Rep. Ismael Mohamed, D-Columbus, asked at a hearing on Oct 7 if those rights could cover things like bad management or neglect.
Rep. Steve Demetriou, R-Bainbridge Township, who pushed for the amendment, said that the rights are only for market changes and won’t cover wrongdoing.
The changes come from a larger national discussion about whether and how states should include digital assets on their books of accounts. Earlier this year, several states put forward plans for “strategic bitcoin reserves.”
One state has already made progress. In June, Texas passed SB 21, which set up a Texas Strategic Bitcoin Reserve that is overseen by the governor. Supporters saw it as a long-term investment that would protect against inflation, while critics warned of risks related to volatility and poor control. As soon as the governor signed it, the law became law.
People in Ohio have mixed feelings about the new version of the bill. Supporters say that the broader scope spreads risk and might be more acceptable to voters and credit-rating stakeholders than a directive that only applies to crypto.
People who are against it say that changing the name doesn’t change how vulnerable you are to changes in the market and that mixing volatile tokens with regular instruments creates problems with oversight and openness that need to be fixed when rules are made.
Early this year, lawmakers started to look at bitcoin and digital asset bills in committee. Ohio is one of the states looking into formal frameworks for storage, payments, and reserves.
The mechanics of the plan, such as limits on how assets can be allocated, custody standards, auditing requirements, and how often reports need to be made, are likely to be at the center of further talks.
A recent local story said that changes to the bill include the possibility of allowing more investments and setting limits on how they can be run. As the bill moves forward, more changes may be made.
The next steps will depend on markups in committees and the schedule for the House floor. If the fund is accepted, it will still need operational rules for risk management and disclosures before any money is given out.